The big data centers required to operate modern artificial intelligence (AI) and other various computing chores are the subject of a lot of controversy, not the least of which is rooted in some "Not in my backyard" (NIMBY) complaints. That's not completely without merit; these data centers are huge, obtrusive, and can be noisy.
Even so, every cloud comes with a silver lining, and in this case, that silver may take the form of lowered base rates for local residential and business utility accounts. It's already happening in a few places.
Several major electric utilities have recently announced that their residential customers will have lower electric bills because of major investments in new power plants and the electric grid, enabled by data centers.
Data centers generally need electricity 24/7 and are willing to pay whatever is necessary to ensure reliable power is always available. That enables more plants to be built and revitalizes our aging transmission grid.
On May 27, the Georgia Public Service Commission (PSC) approved a plan to lower rates by approximately $50 per year for the typical residential customer. Total annual savings will be approximately $285 million.
This isn't the only place where a sudden increase in supply is dropping prices.
On March 5, Entergy announced, “approximately $5 billion in total savings for 2.3 million customers in Arkansas, Louisiana, and Mississippi because of data center customer agreements in those states.” The savings are over the next 20 years.
Entergy also said the data centers were responsible for “approximately $47 billion in total new investment for communities, thousands of high-tech jobs, millions of dollars in new tax revenues,” and many other benefits.
On February 24, American Electric Power’s Indiana Michigan Power (I&M) company announced it would be filing to reduce base rates, the largest portion of most of its 600,000 customers’ bills, this summer.
That's certainly good news, if it all works as expected.
Read More: New Report: Overseas Billionaires Bankroll Anti-AI Push Against U.S.
Trump’s AI Push Runs Into a Major Problem: Americans Don’t Want the Data Centers
These data centers are power-hungry things. I've written before about the possibility of using small modular reactors to keep their own in-house electricity sourced, but that wouldn't result in any scale-up generation capacity for the area around the plant; these agreements would seem to be having utility companies ramp up capacity, not for what they need today, but for what they might anticipate needing in the future.
Incentives matter. Increasing reliance on these data centers for our increasingly AI-using, online lives - and that's where we're headed, no matter how much the Gray Panthers among us shout about people getting off our lawns - is going to only increase the need for these data centers. That's going to mean more generation capacity. And, as we are seeing in these places, that's already dropping base rates. It's in the interests of both the companies running the data centers and the utility companies to stay ahead of this particular curve.
Energy is at the heart of everything we do. Forget solar, forget wind. We need reliable, affordable, and constant electricity more than ever. Fortunately, supply and demand apply - and the supply may be about to see a rapid increase.
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